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Lemass’s economic expansion policy saved Ireland

Seán Lemass tapes: 1958 plan to reverse protectionism and open Ireland up to foreign investment had a galvanising effect on the economy

The 1950s was the darkest decade, marked by emigration of nearly 50,000 people a year. One of the great what-ifs of Irish history is what would have happened if Seán Lemass had become taoiseach earlier.

Would much of the stagnation of the 1950s have been avoided if the economic plan published by Lemass a year after he took over from Éamon de Valera had been introduced earlier?

Lemass himself was unsure when he was questioned a decade later by Dermot Ryan if he could have brought forward such a plan had he been taoiseach five or 10 years previously.

“It might be true,” Lemass responded in recordings later transcribed by Ryan, “but it is very hard to be sure about this because my own thoughts were only developing at that time.

“Generally, I think that this could have happened earlier, but we could not really get down to the work of preparing an official programme for economic expansion until we were in government as a majority.”

He criticised the inertia of de Valera in the 1950s whose “capacity to devise change had diminished and any proposals I brought forward were always subjected to debate rather than decision”.

So Lemass decided to publish his own plans while Fianna Fáil was still in in opposition. They appeared as supplements in the Fianna Fáil-supporting Irish Press in 1955 and 1956.

“This conception of programming began during the period when were in opposition and I suppose it was largely my conception. I induced the party [Fianna Fáil] to accept my ideas,” he said.

The plan, entitled Economic Development, published in 1958 and drawn up mostly by civil servant Ken Whitaker, opened Ireland up to foreign investment and sought to dismantle the protectionist nature of the Irish State.

Protectionism had been central to Irish economic planning after independence, standing at the heart of Fianna Fáil's belief in Irish self-reliance. However, it was an increasingly discredited philosophy in the post-war boom era in Europe.

Gross inefficiencies

Protectionism had led to gross inefficiencies in Irish agriculture and industry, while foreign capital was distrusted as undermining Irish economic independence.

Economic Development had to work. The 1950s was a lost decade for the Irish economy. From 1951 to 1961, 408,000 people left Ireland and yet even the opportunities for those left behind were diminishing. Unemployment and social stagnation stalked the land. Many questioned the viability of a State which was just 35 years' old.

Economic Development was in many ways an act of desperation. "Everybody had lost confidence in the country," Lemass recalled.

“The whole movement for emigration during that period was attributable to a lack of confidence in the future of the country as there was inability to get employment here. If that could not have been reversed, then we would have been sunk, undoubtedly.”

The idea of a National Development Plan was Fianna Fáil policy in the 1957 general election. The civil servant TK Whitaker was given the task of preparing it.

Lemass was involved in it too but admitted it was not always easy. “I was one of the people who was regarded as a party authority on economic policy, but this did not necessarily involve my deciding priorities. There were many contentious arguments between myself and the minister for agriculture and also on the financial side.”

He adopted the Veroni plan, an economic plan that was produced in Italy in the 1950s to stimulate its post-war economy.

“I worked out a plan of my own. This was very crude and amateurish in many respects, but it did involve our commitment to the idea of programming for the future.”

He believed the plan, which was contained in the Fianna Fáil manifesto of 1957, was one of the reasons the party won a thumping majority of nine in that year’s general election.

Lemass said its publication in 1958 had a galvanising effect as Irish industry responded to it with relief.

Economic planning for Ireland had been a “revolutionary concept” but was accepted immediately by the trade unions, farmers and industrialists.

Lemass maintained the despair surrounding the country disappeared between 1960 and 1961.